In a recent ruling, the Bombay High Court, while dealing with a project "North Sea Heights (A1)" has come to the respite of home buyers by permitting home buyers who have successfully obtained refund orders from RERA to withdraw the amount deposited by the builders while filing Appeals against such orders.
In this case the allottee had paid substantial amounts of ₹98.92 lakh and ₹69.66 lakh respectively for purchasing two flats. The Sale Agreements were executed on 2nd November 2015. Possession was promised by 31 December 2018. However, as often happens, the project remained incomplete, with construction stalled and possession not delivered even thereafter.
The buyer advisedly approached Maharashtra Real Estate Regulatory Authority seeking refund of the amount paid with interest under Section 18 of RERA Act, 2016 and obtained orders directing the builder to refund the entire amount with statutory interest. However, the promoter, to entangle and frustrate the home buyer, challenged this before the Maharashtra Real Estate Appellate Tribunal, Mumbai, ("Appellate Tribunal") under Section 43 of the RERA Act. Pertinently, this section, required the builder to deposit at least thirty per cent of the penalty, or such higher percentage with the Appellate Tribunal. The builder had accordingly deposited Rs.1,76,28,138/- and Rs.1,50,09,055/- respectively. However, interestingly, under Section 43 does not expressly empower the Appellate Tribunal to permit the buyer to withdraw the amount so deposited.
The Appellate Tribunal nevertheless passed an order dated 6th January 2026, permitting the buyer to withdraw the deposited amount subject to an undertaking. This order was again challenged by the builder before the Bombay High Court. The Bombay High Court, fighting for the cause of the home buyer, keeping the object of the Act in mind i.e. protection of home buyers interests and the inordinate delay by the builder in handing over the possession, unequivocally upheld the order directing withdrawal of the deposited amount and found that the Appellate Tribunal retains discretion to permit withdrawal in appropriate cases.
Guidelines Laid Down by the Court:
The Court has gone ahead to lay down the following guidelines which need to be kept in mind by the home buyers while praying for withdrawal of the amount deposited by the builder:
- There should be no dispute as to the quantum of amount paid by the buyer.
- Substantial time should have elapsed since payment.
- Stage of development of the project.
- Whether the project was complete when the order of refund was passed — completion status.
- Whether possession was offered and justifiably refused.
The above order has come as a huge respite for the home buyers, as the builders will now find it difficult to entangle the home buyers in a never-ending battle of litigation, while enjoying the fruits of the hard-earned money, paid by the home buyers, for years together.
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